Starting a Chocolate Company

[SkyRobo1]

Hello Everyone,

Its nice to meet everyone! I am planning to start a bean to bar chocolate company in one years time. So far what I've done are;
- Business Plan
- Sourcing of Raw materials
- Accumulating of Starting Capital
- Brand Creation

And to begin I plan to start my business at home in my kitchen for a year as a way of "Proof of concept". I'll also use a company formation like Tide or Companies Made simple. So that should cover the registration for HMRC, Company house and bank business account. My question really is what else am I missing in my steps? Do I need a food license? What other licenses do I need to consider?

Also my plan is after I've proven my concept works I plan to move into "Containerville" in london to start a bigger production before ending with my end goal. My sales channel at the start will be solely online, family and friends and my towns local market days.

Thank you I will appreciate any help you guys can give me and if you guys have any advice that I didnt cover please do as Im trying to absorb as much knowledge as I can as I prep for my business.

Thank you!!!

 

[fisicx]

Marketing!

More important than the brand or the product.

Doesn't matter how good the product if nobody knows about it the business will fail. What ever the cost of setting up the business multiply the figure by 10 to cover marketing.

Many think they can promote on social media but it’s saturated with many others all doing the same. You could get a market stall but that’s not cheap. Selling in local shops will mean knocking on lots of doors and accepting sale or return.

Well done for getting a business plan in place but a marketing plan is vital.

 

[Mark T Jones]

The answer to your question very much depends what is in your business plan. That should be a researched document outlining operations, marketing and financial.

In reality, all too often they are just pages of waffle and wild assumptions.

Being practical, you need to familiarise yourself with regulations around food prep and labelling

 

[Paul Kelly ICHYB]

Well done for getting this far.

Are you aware of H&S requirements?

Please do a couple simple calculations (which business plans and financial forecasting don't always cover), especially about getting a kitchen.

1. Work out all of your costs to calculate an average cost per item - raw materials, professional costs, property & all expenses etc.
2. Calculate an average selling price per item (I appreciate that there will be a variance per item, but just get to an average)
3. You can then work out how many items you need to see a month to break even
4. Go back to 1 and add a wage into the figure (you will have missed that)
5. Recalculate

This is a very raw calculation, but will make you think about how many items you need to sell to keep your head above water, allowing you to not only see what sales could be but also can your production keep up with sales!

As mentioned, marketing will be your biggest cost (potentially more than facilities). Please do not fall into what is becoming the biggest point of failure for businesses I speak to and believe that social media will make your millions (without careful management).

 

[DontAsk]

Talk to your local authority about running a food business from your home kitchen. See also https://www.food.gov.uk/business-guidance/starting-a-food-business-from-your-home

Talk to your landlord/mortgage provider about running a business from home.

Get appropriate insurance - public and product liability at then very least.

Don't do this https://www.bbc.co.uk/news/uk-england-nottinghamshire-67592978

 

[kantanLiving]

Also if your starting out, why did you consider tide as your starting option? there are plenty of free banking options that would suit a starter more, and then if your looking for the extra features that tide do, you could consider them in future when your earning profit or in a better position??

For example, tide charge every in or out transaction and withdrawal. Banks like starling, or even highstreet ones, dont charge anything for start up business accounts. Its already a signifcant saving. Tide entice people stating you can get a free business registration. But that you can do yourself online at company house for like £10 or £15.

will you deal with cash or purely online banking? Tide dont have physical premise so you will have to go into a post office or a partnered bank to deposit money again = consumed time and money.

You could consider Natwest, free onling banking, access to a branch for depositing if needed, and free accounting software for invoicing, reconciliation and tax simplicity.

Note: if you have pets, you may find it difficulty to use your own Kitchen for running a food business. As others have mentioned speak to your local authority.

 

[macScot]

Make sure your food product is correctly packaged and labeled.

Packaging and labelling

Legal requirements that you have to follow as a food business.

www.food.gov.uk

Also if you intend to sell the items abroad e.g. export to the EU then research any other labeling requirements in these regions.

You may need to get the food items (and maybe the packaging too) tested for allergens, health and safety etc., and this may mean each batch of produce.

Similarly, the premises and food processing (equipment, storage and processing etc.) would need to meet food hygiene standards, record keeping of fridge temperatures, keeping track of food expiration dates etc.

You may find this site useful

Food safety regulations & legislation | Food Standards Scotland | Food Standards Scotland

Food safety information and regulations guidance for businesses, industry and local authority enforcement officers.

www.foodstandards.gov.scot

 

[macScot]

And this is for new businesses:

Starting a new food business - Your checklist | Food Standards Scotland | Food Standards Scotland

View our checklist for starting a new food business. Find out how to register, organise waste and recycling collection and discover available training options.

www.foodstandards.gov.scot

 

[MarketingQuote]

Just seen this thread and noticed a couple of users have mentioned marketing.

Certainly do not forget your marketing, lots of fledgling companies (like Innocent Snoothies) came from no-where because of their marketing.

 

[Minksood]

Hello Everyone,

Its nice to meet everyone! I am planning to start a bean to bar chocolate company in one years time. So far what I've done are;
- Business Plan
- Sourcing of Raw materials
- Accumulating of Starting Capital
- Brand Creation

And to begin I plan to start my business at home in my kitchen for a year as a way of "Proof of concept". I'll also use a company formation like Tide or Companies Made simple. So that should cover the registration for HMRC, Company house and bank business account. My question really is what else am I missing in my steps? Do I need a food license? What other licenses do I need to consider?

Also my plan is after I've proven my concept works I plan to move into "Containerville" in london to start a bigger production before ending with my end goal. My sales channel at the start will be solely online, family and friends and my towns local market days.

Thank you I will appreciate any help you guys can give me and if you guys have any advice that I didnt cover please do as Im trying to absorb as much knowledge as I can as I prep for my business.

Thank you!!!

Hi,

What are your thoughts on exporting in Asian market?

Many thanks!

 

[NickZ]

What are your thoughts on exporting in Asian market?

Where about in Asia? That is a pretty large continent.

 

[Minksood]

Where about in Asia? That is a pretty large continent.

Starting from India. Big market with lots of potential

 

[NickZ]

Quality always sells, going the cheap route is the way towards failure.

 

[fisicx]

Starting from India. Big market with lots of potential

Why would people in India want to import chocolate from the UK when there is so much local competition?

 

[fantheflames]

Like you said, @SkyRobo1 - focus on your local area then expand to wider areas. Great ideas to expand to other countries but stick to one place first. Call it a test run. Your plan in X amount of years might be to explore other countries, just stick to one for now and put all your chocolate eggs into one basket.

 

[Minksood]

Quality always sells, going the cheap route is the way towards failure.

Not asking to compromise with the quality. It's a large market with lot of potential to grow the product in the market and get established. Why you think it's a cheap route?

 

[NickZ]

Why you think it's a cheap route?

I did not insinuate that you go a cheap route.
Most people wrongly believe that price is the indicator for success.

 

[datagatherer]

Hello Everyone,

Its nice to meet everyone! I am planning to start a bean to bar chocolate company in one years time. So far what I've done are;
- Business Plan
- Sourcing of Raw materials
- Accumulating of Starting Capital
- Brand Creation

And to begin I plan to start my business at home in my kitchen for a year as a way of "Proof of concept". I'll also use a company formation like Tide or Companies Made simple. So that should cover the registration for HMRC, Company house and bank business account. My question really is what else am I missing in my steps? Do I need a food license? What other licenses do I need to consider?

Also my plan is after I've proven my concept works I plan to move into "Containerville" in london to start a bigger production before ending with my end goal. My sales channel at the start will be solely online, family and friends and my towns local market days.

Thank you I will appreciate any help you guys can give me and if you guys have any advice that I didnt cover please do as Im trying to absorb as much knowledge as I can as I prep for my business.

Thank you!!!

Welcome!

My advice, get a website up online now along with socials, build some excitement, document the journey from your logo to the sourcing, the recipe testing (and tasting), get on socials, get your site climbing in the search engines sooner.

Will you be ready for October? Some Christmas markets start early.

Visit other bean to bar companies, attend any workshops, tasting or other they offer, go as a complete "novice", ask questions, get answers, take photos of their packaging, look at all the fine detail including batch numbering, allergens, find out their pricing... research is key.

Will you be just another bean to bar company? Why should customers buy from you over an established company?

If you need a hand with branding, design for print or digital, a website or more, although doing less of this now, I was for 15+ years.

I had a chocolate bar client years ago, moved back to South America, but I helped save them a lot of money in packaging especially.

Oh, and I bloomin' love chocolate.

Jack

 

[centuryitservi]

Hi SkyRobo1

I would recommend some thorough research initially on your intended marketplace, what immediate local competition you might have.

Determine what profit margins you might expect, try to be conservative in those assumptions, if things are better than your conservative assumptions, then that's a positive.

Determine what your start up costs might be, formulate a Business Plan

With the information above, extrapolate what your potential earnings are likely to be, weigh and decide if those levels are acceptable, or what elements of your business plan need to be tweaked to help ensure you are happy with those profit levels. Check again if with that business plan and pricing structure is competitive in your market space.

Or you product is more of a bespoke offering that you could potentially charge a premium for.

Once you are happy with the theoretical framework of your business, you could move onto more practical aspects, for example, building a social media presence and pipeline, building a website and online shop

For additional business advice and guidance we used the Federation of Small Business and Hampshire Chamber of Commerce

Regards

Paul